§ 22-21-324 — Use of Proceeds

(a) The principal proceeds derived from any borrowing made by an authority shall be used solely for the purpose or purposes for which such borrowing was authorized to be made. If any securities are issued for the purpose of financing costs of acquiring, constructing, improving, enlarging and equipping health care facilities, such costs shall be deemed to include the following:
(1) The cost of any land forming a part of such health care facilities;
(2) The cost of the labor, materials and supplies used in any such construction, improvement or enlargement, including architectural and engineering fees and the cost of preparing contract documents advertising for bids;
(3) The purchase price of, and the cost of installing, equipment for such health care facilities;
(4) The cost of landscaping the lands forming a part of such health care facilities and of constructing and installing roads, sidewalks, curbs, gutters, utilities and parking places in connection therewith;
(5) Legal, accounting, publishing, printing, fiscal and recording fees and expenses incurred in connection with the authorization, sale and issuance of the securities issued in connection with such health care facilities; bond discount, commission or other financing charges; fees and expenses of financial advisers and planning and management consultants; the cost of any feasibility studies deemed necessary or advisable in connection with the issuance and sale of such securities; the amount of any debt service reserve that the board deems necessary or advisable to be funded out of the proceeds from the sale of such securities; and such other expenses as shall be necessary or incident to such borrowing;
(6) Interest on such securities for a reasonable period prior to the commencement of the construction and equipment of such health care facilities, or of any improvements or additions being financed (in whole or in part) out of the proceeds from the sale of such securities, and during the period estimated to be required for such construction and equipment and for a period of not more than two years after the completion of such construction and equipment;
(7) The reimbursement to itself, or to its general fund or any one or more of its other funds, to any authorizing subdivision or other county or municipality, and to any public hospital corporation or other public agency, authority or body, of any funds advanced, to or for the benefit of the authority or any health care facilities owned by it, in anticipation of the issuance of securities by the authority, including the amount of any interest paid or incurred on any borrowings made for the purpose of obtaining funds to advance to or for the benefit of the authority or such health care facilities; and
(8) The amount of such reserves for the payment of debt service on any such securities and for the maintenance, repair, replacement, improvement and enlargement of any of its health care facilities and other properties as the board shall deem advisable.
(b) Any portion of the principal proceeds derived from any such borrowing not needed for any of the purposes for which such borrowing was authorized to be made shall be applied and used:
(1) For retirement of the securities issued in evidence of such borrowing;
(2) For payment of the interest thereon;
(3) For payment into one or more special funds created for payment of principal or interest, or both, or for the creation of reserves for the payment of debt service or for maintenance, repair, replacement, improvement or enlargement; or
(4) For any combination thereof, all as shall be specified in the indenture under which such securities are issued or in the resolution of the board authorizing any such borrowing.

Legislative History

(Acts 1982, No. 82-418, p. 629, §15.)